Can one strategy work "most of the time" in any market condition?

[trend2009]

LOL, 6 months, I can laugh...now having 43 years at my back, since 1992 learned to program, most of my time of building systems is back testing.

"Strategies", did you build them or from books that thousands have read before you or internet, if they were free, you get what you get. How much of the strategies were based on charting? Did you know that 99% of systems are based on risk management and entries are 1% of the system? Most don't have large enough sample size, 3,000 minimum over several years, most can't read charts and have no clear understanding of toping/bottoming formations, or average swing lengths for uptrend or downtrend, "mean" average of retracements. What's the difference between buying on momentum or buying as it drops as per risk?

You build enough systems each year and test them well, there are some that work on every timeframe, every instrument, BUT risk changes depending on different factors, cost of stocks, cost of futures contracts, expirations of futures and options, changes in open interest and new contract highs in futures, no options in futures, seasons, political unrest, government reports etc...If you trading a $9 stock can't use same percentages on a $900 stock. Each stock has it's own personality.

Also, acceptance, hard to learn, learning to accept all systems have some type of drawdowns, BUT this is learned through back testing. Also, one's equity curve, learn when you are due for drawdown and then cut back size.

do you have an automated system trading on charts?

 

[Peter8519]

Yes, trend following strategy.
But it is too general.
Everyone knows trend following is good, but very few can apply it.
Because very few people know where trend starts, and where it ends.

So the key point is your strategy should figure out where a trend initiates, and where it ends.
And so you know where to enter, where to stop and where to take profit.

It's simple. Just to name a few. (This is not a recommendation but just for illustration.)
A, BIO, DHR, ABB, JCI, MTD.... I can go on and on. Some swear by the 50MA.

 

[wmwmw]

It's simple. Just to name a few. (This is not a recommendation but just for illustration.)
A, BIO, DHR, ABB, JCI, MTD.... I can go on and on. Some swear by the 50MA.

Awesome picks.
All your picks are in strong up trend.
These are the ones that I would like to trade, but I don't trade individual stocks.
I trade index futures and currency.

Look at USDJPY and EURUSD on Friday,
This is so called a strong trending market, a strong intraday trend, low risk and high profit if you do trend following trading.

 

[wrbtrader]

Hi, After trying many different strategies for more than 6 months, it feels like there's no one winning strategy that mostly works. Some strategies work really well for a few weeks, and then go through a cold period - both on the long and short side, small or large caps.

Books like "Trading in the zone" say that the market does not have any bearing on its past and every day is a new day - but this is clearly not the case as we can see that in the summer months, there is a stretch of choppiness. And other stretches of "cold" and "hot" periods confirm this.

My question is, how do we cope with this? How do we know when the market is even changing and what the current condition is? I am just looking for a simple strategy that works "fairly well". I don't want millions or lambos, just want consistency.

Also please don't reply with responses like "Trading requires discipline" for my consistency question. I know all that theory about risk management pretty well TBH and I'm pretty good with following it in my experience. I feel like that's not enough and there's more to the changing markets that I am missing, than risk management.

You already answered your question about how you know that the market has changed when you stated you have a few strategies that go through a "cold period".

Simply, that means the market condition has changed.

Also, a cold period can imply one of two things: 1) You're not seeing as many trade signal opportunities as you were seeing before 2) You've hit a drawdown period that's unexpected or expected

You will never have a trade strategy that works well in all types of market conditions. Thus, one month you may be hugely profitable, another month you may be about breakeven, another month you may be profitable but barely make enough money for some to pay the bills, and then there will be a month you're not profitable.

It's because the market conditions keep changing along with the fact how you're intepreting the markets is changing.

Therefore, you're correct...there's more to just markets changing and risk management...

You're the other key variable. You're that captain of the ship.

wrbtrader

 

[Ryder]

it feels like there's no one winning strategy that mostly works. Some strategies work really well for a few weeks, and then go through a cold period - both on the long and short side, small or large caps.

I think this depends on the type strategy.

If it is based on some kind of mechanical repetition of a certain mix and juxtapostioning of various indicators it will not work all the time because, by definition, it requires market movements to repeat in the same or similar way in order to produce the same outcome.

But I think a strategy based on a significant degree of discretionary interpretation of Price Action techniques like S/R, candlesticks, trendlines, etc is more likely to be consistent over time in spite of changes in market characteristics. This is because these techniques are designed to reflect whatever the market is doing at the time regardless of what it may have been doing previously.

 

[wmwmw]

I think people have different interpretation for the words" works in all conditions".
For example, a trend following strategy works perfect in a strong trending market.
It works not as good in a seesaw or range market.
But as long as the strategy can live through it and come out winning at the end, you will call it"work in all conditions".
It doesn't mean your strategy needs to work as good in a strong trending market as in a seesaw or range market.A trend following strategy winning big in trending market and losing small(or winning small)in a seesaw or range market, and come out totally winning, is a strategy that "works in all conditions"and is a winning strategy.

On the other hand, if your strategy works in one condition and loses in another condition, and it come out in a total loss, then you have not built a winning strategy.

 

[notagain]

10yr weekly, AAPL buy and hold vs long only SMA 2,6 crossover with stochastic cross above 20.

 

[SimpleMeLike]

Even if you have 5k to trade you can split that among 2-5 different trade ideas that are not correlated.

Hello longandshort,

Very good point.

You can do it on the Micro Futures instruments (MES, MNQ, MYM gold and nowe crude oil)

Take the $5000 and split into five $1000 and put it on 5 micro trading ideas. And make sure they are not correlated. It's a good idea to do.

Thanks sir.

 

[Bastion_01]

Hello longandshort,

Very good point.

You can do it on the Micro Futures instruments (MES, MNQ, MYM gold and nowe crude oil)

Take the $5000 and split into five $1000 and put it on 5 micro trading ideas. And make sure they are not correlated. It's a good idea to do.

Thanks sir.

why only 5? hell, he should go for 100 trades of $50 exposure each, just make sure they all have nearly 0 correlation. you can do it OP!!!

 

[NotKnown]

Depends what you trade. I only trade indices and my tools work on any index most of the time. Low volatility can be a problem but those days are easy spot. I only trade intra day. My philosophy has always been to learn to trade 1 instrument class and trade it well. My "system" can trade almost any time frame but you have to take into index volatility. Low vol requires a longer time frame (mostly).